House Democrats Consider Kodak’s $ 765 Million Loan
The meteoric rise, then the fall, of Eastman Kodak the shares – and the recent earnings from senior executives there – are getting more attention. House Democrats are now considering a Federal loan of $ 765 million as well as the commercial activity of the directors of the company before the public announcement of the loan.
The rise in stock prices was spurred on by President Trump’s invocation of the Defense Production Act – and, more specifically, by the fact that Kodak would secure the $ 765 million loan to allow him to start trading. make some of the ingredients that are found in generic drugs. Kodak, of course, has long been known for its camera and film business rather than its pharmaceuticals.
According to a press release, Democrats in the US House of Representatives have requested documents and information regarding the loan, which is funded by the US International Development Finance Corp. (IDFC). They also question Kodak’s lack of experience with the pharmaceutical industry.
Democrats – Rep. James E. Clyburn, chair of the special subcommittee on the coronavirus crisis; Representative Maxine Waters, Chairman of the Financial Services Commission; and Representative Carolyn B. Maloney, Chair of the Oversight and Reform Committee – sent letters to the head of the IDFC and to Jacques Continenza, President of Kodak.
Actions follow a loan investigation by the United States Securities and Exchange Commission (SEC). Of particular interest to the SEC is how Kodak controlled the release of information about the loan, which was gathered and reported on July 27, the day before the official announcement, by hometown television stations in the company, Rochester.
The day before the announcement, Kodak granted options on 1.75 million shares – valued at approximately $ 16 million – to Continenza, The Wall Street Journal reported.
On July 29, shares rose more than 300% intraday, to over $ 26 per share.
Members of Congress said the Kodak loan “was the first announced” by the IDFC after a May 14 executive order authorizing it to grant loans under the Defense Production Act in connection with the pandemic.